17.10 (close): Growing doubts over the health of the US economy and fears over a possible bird flu pandemic sent global stock markets diving.

The FTSE 100 Index closed down 1.5 per cent - its third day of losses - after figures showed the world's biggest economy created far fewer jobs than expected in March.

The London market ended down 94.3 points at 6249.8, while on Wall Street the Dow Jones Industrial Average fell 0.8 per cent, after American employers added workers at the slowest rate in nine months.

The non-farm payroll figures - seen as
a barometer for the health of the US economy - showed employers added
88,000 jobs last month, far short of the 170,000 to 200,000 expected by
economists.

Market falls were echoed in Europe, with the Cac 40 in Paris down 1.7 per cent and the Dax in Frankfurt down two per cent.

The latest bleak economic data from
the US follows more warning signals from the eurozone in recent days.
Data yesterday showed the eurozone's services sector activity shrunk
more than originally expected in March.

The figures will heighten fears over
the sustainability of America's recovery and the prospects of Europe's
recession dragging on.

That risks bringing the FTSE 100's
10-month rally to a juddering halt. The London market has now shed about
162 points since the opening bell on Tuesday signalled the start of the
second quarter.

Craig Erlam, market analyst at Alpari,
said: ‘The optimism surrounding the recovery in the US has been
shattered in the space of a week. The second quarter decline in the US
is well and truly under way.’

Sterling made gains on the dollar,
with a pound worth 1.53 dollars, but lost out narrowly on the euro, to
make a pound worth 1.18 euros.

Economic fears were compounded by nervousness about a recent outbreak of deadly bird flu in China.

Six people have died and authorities
have ordered the slaughter of all poultry at a Shanghai market where the
virus was detected.

Worries about the impact on global
travel sent airline stocks diving, with British Airways owner
International Airlines Group falling 6.9 per cent or 17.4p to 234.9p and
Thomson owner TUI Travel plunging 14.6p or 4.7 per cent to 298.6p.

EasyJet, a new entrant to the FTSE
100, shed 6.4 per cent or 70p to 1027, with wider market uncertainty
compounded by its half-year trading update which highlighted continued
pressure from fuel prices and the weaker pound.

While the Luton-based carrier expects
to almost halve half-year losses due to a surge in Easter bookings,
investors took the opportunity to take profits following a run that has
taken the company into the blue-chip index.

The prospect of another weekend of
cold weather did little for confidence in blue-chip retail stocks, with
Next closing down 155p or 3.6 per cent at 4170p and Marks & Spencer
2.6 per cent down or 10p at 376.8p ahead of a trading update next
Thursday.

M&S has seen clothing sales
squeezed by heavy discounting and weak consumer sentiment and analysts
expect the prolonged cold spell to have added to its woes by hitting
sales of its spring/summer range.

The biggest risers on the FTSE 100
were Eurasian Natural Resources ahead 7.9p at 243.1p, Randgold Resources
up 130p at 5290p, Fresnillo up 22p at 1309p and BAE Systems gaining
3.4p to 386.3p.

The biggest fallers on the FTSE 100
were International Airlines Group falling 17.4p to 234.9p, EasyJet down
70p to 1027, TUI Travel plunging 14.6p to 298.6p and Amec off 46p at
1052p.

15.30: Following
disappointing US non-farm payrolls data the FTSE 100 has dropped 125
points (1.97 per cent) to 6,218, while the Dax in Germany and CAC 40 in
France are down 2.1 per cent and 2.2 per cent respectively.

Just 88,000 jobs were added across America in March - the slowest pace of jobs growth in nine months.

The Footsie is now down 40 points to 6,304, having dipped briefly under the 6,300 mark.

Brenda Kelly, market analyst at IG,
commented: 'While Japan’s Nikkei surged to its highest closing level in
over four years [up 199 points to 12,833], the upbeat mood has not made
the journey west. In early morning trade there is little appetite for
risk-taking.

'Despite
an 8.5 per cent increase in revenue-per-seat growth, budget airliner
easyJet has failed to take off, dropping 3.8 per cent on news that
first-half profit would fail to match previous guidance.'

09.15:

The FTSE 100 suffered another
downbeat session today as investors opted to remain on the sidelines
ahead of all-important jobs figures in the United States.

Having fallen by more than 70 points
in its past two sessions, the FTSE 100 slipped another 32.8 points to
6,311.5 on opening as the growing conflict between North and South Korea
also threatened to impact on sentiment.

Analysts
expect that between 170,000 and 200,000 jobs were added by the US
economy last month, although the estimates for Friday afternoon's
figures have been scaled back in recent days due to a run of poor
economic data.

Even if the outcome falls short of
expectations, it may still raise hopes that the US Federal Reserve will
not call a halt to quantitative easing in the near future.

Airline stocks were the biggest
fallers in the top flight after easyJet's half-year trading update
highlighted continued pressure from fuel prices and the weaker pound.

While the Luton-based carrier still
expects to almost halve half-year losses due to a surge in Easter
bookings, investors took the opportunity to take profits following a run
that has taken the company into the FTSE 100 Index.

Shares were off 3 per cent or 36.5p to 1060.5p, while British Airways owner International Airlines Group fell 9.55p to 242.75p.

In Japan overnight the Nikkei hit its highest level in almost five years, as massive monetary stimulus to get the economy going was unveiled. The market breached 13,000 for the first time since 2008 before slipping back to close up 1.58%, or 199 points, at 12,833.

Jason Hollands, of broker BestInvest, said:'Japanese stocks have been trading below their book value until recently, so the starting point of this remarkable surge in Japanese share prices has been very, very cheap prices. We are looking for a sustainable recovery in the market.'

08.30:

The FTSE 100 is seen opening 2 points
higher, the blue chip index having ended down 76 points, or 1.2 per
cent, at 6,344 on Thursday.

This represented its lowest finish
since 27 February, after an unexpected rise in weekly US jobless claims
which raised questions about the strength of recovery in the world's
largest economy.

The
focus today will be on US March non-farm payrolls data, set for release
at 1230GMT, which is expected to show employers added 200,000 new jobs.

CHARIOT OIL & GAS: The oil
explorer rose late on Thursday amid a myriad of speculation including
one that oil giant BP was interested in buying the firm, according to
traders. The Times market report also cited talk that HRT, a big latin
American oil company drilling near Chariot's prospect off Namibia, had
struck and struck big.

EASYJET narrowed its first-half
pretax loss guidance to £60-65million. The airline also said March
passengers were up 5.3 per cent.